Investment Details
Compound Interest Calculator
See how your money grows over time with the power of compound interest and regular contributions.
Total Balance
After 20 years
With $10,000 invested at 7% annual return, you'll have $40,387 after 20 years — about 4.0× your starting balance. Adding $200/month increases that to $144,573. The Rule of 72: divide 72 by your rate to estimate doubling time (72 ÷ 7 ≈ 10 years).
Typical scenario — enter your details above for your personalized estimate.
Not Investment Advice: Projections are hypothetical and assume constant rates of return. Actual investment results will vary based on market conditions, fees, taxes, and other factors. Past performance does not guarantee future results. This calculator does not recommend any specific investment product or strategy. Consult a qualified financial advisor for personalized investment guidance.
Time to Double
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Rule of 72: divide 72 by your rate to estimate doubling time
Interest as % of Total
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Share of your final balance that came from compounding
Growth Multiple
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Final balance divided by your starting principal
Enter your investment details above to see the growth projection chart.
Understanding Compound Interest
What Is Compound Interest?
Compound interest is often called “interest on interest.” Unlike simple interest, which only calculates interest on your initial principal, compound interest calculates interest on both your principal AND your accumulated interest.
This creates exponential growth — the longer your money compounds, the faster it grows.
The Formula
A = P(1 + r/n)nt
- A: Final amount (future value)
- P: Principal (starting amount)
- r: Annual interest rate (decimal)
- n: Times interest compounds per year
- t: Number of years
The Rule of 72
A quick way to estimate how long it takes to double your money:
Years to Double = 72 ÷ Interest Rate
- At 6%: doubles in ~12 years
- At 8%: doubles in ~9 years
- At 10%: doubles in ~7.2 years
Time Is Your Greatest Asset
Starting early matters more than you might think. Here’s an example:
- Early Starter: $200/month from age 25–35, then stops ($24,000 total invested)
- Late Starter: $200/month from age 35–65 ($72,000 total invested)
- At 7% return, the early starter can end up with MORE despite investing 3× less.
Frequently Asked Questions
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, which is only calculated on the principal, compound interest grows exponentially over time. This is why Albert Einstein allegedly called it “the eighth wonder of the world.”
More frequent compounding results in more interest earned. Daily compounding earns slightly more than monthly, which earns more than annually. However, the difference is often small — the interest rate and time period matter much more. For most savings accounts and investments, monthly or daily compounding is standard.
It depends on the type of account. High-yield savings accounts currently offer 3.75–4.25% APY. CDs may offer slightly more. For long-term investing in stocks, historical averages are 7–10% annually (with the S&P 500 averaging about 10% before inflation, or 7% after inflation). However, stock returns vary significantly year to year.
Four strategies to maximize compound growth: Start early — time is the most powerful factor in compound growth. Contribute regularly — monthly contributions add up significantly. Reinvest earnings — don’t withdraw dividends or interest, let them compound. Minimize fees — high fees eat into your returns and compound negatively.
APR (Annual Percentage Rate) is the simple interest rate without compounding. APY (Annual Percentage Yield) includes the effect of compounding. For savings, APY gives you the true picture of what you’ll earn. For loans, look at APR to understand the base rate. APY will always be equal to or higher than APR when interest compounds more than once per year.
Related Guides
Related Calculators
Official Sources
- SEC Investor.gov: Compound Interest Calculator — Official compound interest calculator from the U.S. Securities and Exchange Commission.
- Federal Reserve: APR vs APY Explained — Federal Reserve guidance on the difference between APR and APY.
- CFPB: Save for Retirement — Consumer Financial Protection Bureau resources on saving for retirement.
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